State Accuses Head Shop Owner Of Tax Fraud

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There's more trouble for the 34 year old owner of Tebb's Head Shops.

John Tebbetts is accused of stealing more than $50,000 from New York state.

Attorney General Eric Schneiderman announced Tebbetts' arrest on Monday.

Tebbetts owned a chain of so-called 'head shops,' including one in Watertown, which are now closed.

Tebbetts was charged with second-degree grand larceny and with two counts of second-degree criminal tax fraud.

If convicted, Tebbetts faces up to 5 to 15 years in prison.

The three year investigation, conducted jointly by the Attorney General's office and the Department of Taxation and Finance, included extensive interviews and numerous site inspections of Tebb's Head Shops.

DTF also conducted an extensive audit of Tebbetts' businesses through the review of records such as Z-tapes, bank records, sales journals, tax returns and purchase invoices in order to substantiate business sales.

According to the AG's office, Tebbetts collected taxes on behalf of the state between March 2007 and September 2012 from the sales of items such as herbal incense, pipes, hookahs, body jewelry and dart supplies.

The AG's office said Tebbetts failed to return to the state the full amount of sales tax collected from his customers in excess of $364,000, with an intent to evade taxes due.

Tebbetts owned shops in Onondaga, Oneida, Herkimer, Madison and Jefferson counties.

He's also charged with failure to report taxable sales from Tebb's Head Shops for the periods of March 2007 through August 2012, resulting in sales tax liability in excess of $500,000, which was not remitted to the state.

In December 2012, Tebbetts plead guilty in federal court to numerous federal criminal charges, including possession with intent to distribute a controlled substance.

Tebbetts is currently awaiting sentencing on those charges.

Earlier this month, a Jefferson County man filed suit against Tebbetts for selling him a designer drug he claims caused him severe health problems.

See our earlier report

Wednesday, November 26, 2014
, Watertown, NY

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